Submitted By
Steven Drazner, Chief Financial Officer
Reviewed By
A.M. Zayyad
Agenda Item Title
Title
An Ordinance Amending the Fiscal Year 2022 Annual Budget
End
Overview
Overview
An ordinance is hereby presented to appropriate funds for FY22. Continually, staff evaluates all expenditures and certain adjustments must be made based on various circumstances. Quarterly, or sometimes more often, these adjustments (amendments) must be brought to the Village Board for approval.
The first budget amendment each year usually includes several carryover requests for amounts not spent in the prior year's budget. This is especially true of larger public works projects where the work typically encompasses more than one year. In addition, some requests are for new funding, usually due to re-evaluating costs. Adjustments are thus needed to cover adjusted current year expenditures, as well as corrections related due to oversight or under-estimating certain costs. Such underestimates this year are primarily related to the extreme inflationary environment the economy is experiencing right now.
Body
Staff Recommendation
Adopt the Ordinance.
Fiscal Impact
The new funding and carryover amendments as presented for Board consideration are summarized by Fund as follows:
General Fund $299,863
Motor Fuel Fund $257,542
Madison TIF $117,901
ARPA Fund $6,330,938
CDBG $46,625
Health Grants $161,000
Sustainability $35,000
Building Improv. Fund $107,266
Equip. Replacement Fund $439,044
CIP Main $2,744,931
Water/Sewer $2,422,948
Parking Fund $100,000
TOTAL $13,063,058
Of the new funding requests totaling $6.9 million, the top five include $6,180,938 as the FY21 ARPA lost revenue interfund transfer to the General and Parking Funds, $150,000 being requested for business COVID-19 compliance grants, $136,000 for health grant expenditures, $155,000 for capital (local street construction) expenditures and $93,895 for fire chest compression equipment (paid using 2020 lost ARPA revenues).
The remainder of the approximate $13.1 million in amendment requests relate to carryover amendments totaling about $6.2 million. Almost all of these amendments pertain to large public works capital projects that often span more than one year. In addition, it is common to see delays by contractors invoicing the Village for these projects.
Finally, several budget amendments merely reclass appropriations between or among accounts and this has no net effect on the total budget.
Background
The annual budget which provides a ceiling on spending by account, department, and fund is approved each December for the subsequent fiscal year. While every effort is made during the budget process to project and forecast spending for the following year, there are instances when a budget amendment may be required in the following situations:
1) Funds were not entirely spent in the preceding year and it is thus necessary to shift the unspent budget into the current fiscal year (a “Carryforward” budget amendment).
2) Unforeseen expenditures which were not budgeted are necessary (a “New Money” budget amendment).
3) Funds are merely moved from one account to another within the budget (a “Reclassification” budget amendment).
Alternatives
Additional information will be provided upon request.
Previous Board Action
Ordinance 21-82 was adopted on December 6, 2021.
Citizen Advisory Commission Action
N/A.
Anticipated Future Actions/Commitments
N/A.
Intergovernmental Cooperation Opportunities
N/A.